Banking Operations - Understanding Operations Of A Bank

Description

The course on "Banking Operation" deals with complete banking operations, a bank does through its various channels like Branch, ATM, Phone banking, home banking, Internet banking and POS depending upon the customer’s convenience to save time and money. With the introduction of ATMs, Internet and Mobile banking, banks could reduce the staff strength and waiting period of customers, at branches, because of which a positive impact is seen, on the profitability of banks. Customers like youngsters, Senior citizens and physically challenged are benefited most by the new age banking facilities.

What is a typical bank’s branch organization chart and how it works, is shown with the help of a diagram for easy understanding. The process of opening of various type of accounts of customers by a bank, are narrated in detail. The requirement of different types of additional documents such as Partnership deed, Trust Deed, Memorandum and Articles of Associaton and Byelaws of Society, HUF letter etc. depending on the type of account, the need of verification of the informaton provided by the customer with originals and from other genuine sources, adherance of KYC guidelines by banks, precautions while handling a minor’s account, additional requirements in case of opening of Non Resident Accounts and its operation are described in detail.

How an account becomes dormant, what precautions a bank should take while operating such accounts, and the necessity for registering nomination for all deposit accounts are briefed in the session. What are the guiding principles relating to lending by banks, comprehensive descriptions about Retail and Corporate loans, how the financial requirement of a borrower is assessed by various methods of lending for Working Capital Limits, Term Loan (fund-based ) and Non-fund based credit limits ( L/C, BG ) are discussed in detail. Advances play a vital role in the bank’s prime functions, earning interest income to the bank, and are classified under Schedule 9 of the Bank’s Balance Sheet. Banks’ contingent liabilities like Letters of Credit and Bank Guarantees, its nature, parties involved in these, how it becomes fund-based advance, upon devolvment of L/C and invocation of Guarantees, are discussed here to understand the basic concepts and the difference between the two. Caculation of different financial ratios from the balance sheets for the previous years of the borrower to arrive at a conclusion of the repaying capacity and the background of the firm is very critical, in the assessment of the financial requirement of the firm. How a borrowal account turns into an Non Performing Asset (NPA) is of prime importance and assets classification, in general are described.

The banks’ roles in curbing / reducing the NPA to its lowest level, thus helping to improve the bank’s financial health, is explained well. How NPAs are managed by banks also discussed here. Prime and Collateral securities are offered by borrowers to the bank to secure the debts. How banks charge these securities by different ways like Pledge, Hypotecation, Mortgage, Assignment, Lien, Set off are explained step-by-step. Different types of mortgages and the salient features of each are also briefed here. Documents required for processing of loan / advance are discussed.

The essential points while executing documents like, correct filling, adequate stamping, keeping the documents alive and safe keeping of the executed documents are to be ensured by banks very meticulously to safeguard the interest of banks, in case of future default. Post disbursal activities of a bank are also equally important as the assessment of the working capital and execution of documents. These activities are also explained. Processing of payment and various products used by banks in this field, are discussed in a detailed manner for easy understanding. Different Core banking solutions used by banks, as also various banking frauds prevalent now, and how to not become victims of such frauds are briefly discussed for information.

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